As companies across the world race to develop more loyal and profitable customer relationships, the competition is fueling a spectacular burst of technological growth. At the heart of this rapid expansion is customer relationship marketing, a strategy to increase customer retention by making loyalty more convenient for a customer than disloyalty. This concept has been supercharged in recent years, thanks to the emergence of powerful, reasonably priced new technologies that speed the flow of mission-critical information across the enterprise. Any enterprise can now use currently available technology to interact with customers individually, on-line, on the phone, at the point of purchase or through an automated sales force. And any enterprise can use currently available technology to customize its products or services in order to offer goods and services that meet the real individual needs of the customers.

This poster, produced by DM Review, details the methodology developed by Marketing1to1/ Peppers & Rogers Group and will serve as a valuable reference for initiating a customer relationship marketing program.

You must identify your customers. It's critical to know customers in as much detail as possible - not just name and addressable characteristics, but habits, preferences, and so forth. If a company hasn't acquired the addressable identities of at least a fair number of its most valuable customers, then it isn't prepared to launch a one-to-one initiative.

Once customers have been identified, the next step is to differentiate them in order to:

  • Prioritize your efforts and gain the most advantage with the most valuable customers, and
  • Tailor your firm's behavior to each customer based on that customer's individual needs.

Customers are different in two principal ways: They represent different levels of value (i.e., most valuable customers - MVCs, most growable customers - MGCs and below zero customers - BZs), and they have different needs from you. The degree and types of differentiation in your firm's customer base will also help you decide which one-to-one strategy is more appropriate for a particular business situation. INTERACT
You must interact with your customers. To make these interactions more efficient, drive them into more automated, cost-efficient channels. Push call center interactions toward your Web site, and push personal sales calls more to the call center. To improve the effectiveness of each interaction, gather only relevant information when it is needed to:

  • Better grasp a customer's individual needs, or
  • More accurately quantify a customer's potential value.

In addition, every interaction with a customer should take place in the context of all previous interactions with that customer. A conversation should pick up where the last one left off, whether the previous interaction occurred last night, last month, at the call center or on the company Web site.CUSTOMIZE
You must customize some aspect of your enterprise's behavior toward your customer based on that customer's needs and value. To lock a customer into a "Learning Relationship," a firm must adapt some aspect of its behavior to meet that customer's individually expressed needs. This might mean mass customizing a manufactured product or it could involve tailoring some aspect of the services surrounding a product - perhaps the way the invoice is rendered or how the product is packaged.
Use the "picket fence" concept to partition off your most valuable customers and protect them from product-driven marketing initiatives. On the left side of the fence (see graphic) you practice marketing as usual. On the right side of the fence, where your most valuable customers are located, you begin implementing your one-to-one marketing initiatives. Establish dialogues with these customers, interact with them as often as you can. Remember everything they tell you, and do your best to change your company's behavior to reflect what you have learned from each of these customers.

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